With the rise of the popularity of cryptocurrencies, the issue of crypto taxation has also become a very important aspect of the cryptosphere. It is imperative that there exists complete clarity about taxation parameters, as any sort of ambiguity might lead to serious problems.
As per recent reports, members of the United States Congress, who are on the blockchain committee, chaired by Tom Emmer has requested the US Internal Revenue Commissioner (IRS) to grant proper guidance on the filing of the crypto-tax related system. The chairman, along with other committee members drafted a letter, highlighting the various pertinent issues and presented it to the IRS for proper redressal.
The issues linked with virtual currencies cost-based calculation, procedures and taxable income ratio. The IRS was not able to address the grievances of the tax-related questions, back in 2014 and the tax-payers are still in a state of despair. The recent committee has requested that the IRS provide proper details as it has been 5 years since the last report was published and it is pretty outdated by now.
Emmer has repeatedly stressed on the fact that guidance is a pre-requisite for systematic reporting of emerging assets and therefore the updated proper guidelines about virtual currencies are necessary and for that, they requested the IRS to work on this matter. The UK has devised a proper system of transactions and reporting of taxes about virtual currencies and their system is updated and more systematic; as compared to the US where the taxation process is still not a practical one. The U.S. is lagging behind in this regard. However, they claim that they are constantly trying to provide an environment conducive for new industries to flourish and are trying constantly to fulfil their promise. Therefore a bill of elimination of cryptocurrency which was designed previously is presented again to be reconsidered.